What is it?

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What is it?
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The rise of the platforms
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How does it work?
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How does it work?
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How does it work?
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How does it work?
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How does it work?
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Different models
Donation based Allows charities, or those who
raise money for social or charitable projects, to
gather a community online and to enable them to
donate to a specific project.
Reward based Enables people to contribute to
projects and receive nonfinancial rewards in
return, usually operating a tiered system where
the more you donate the better the reward you
receive.

Lending based Projects or businesses seeking
debt apply through the platform uploading their
pitch, with members of the crowd taking small
chunks of the overall loan.
Equity based Enables the crowd to invest for
equity, or profit/revenue sharing in businesses
or projects. This form of the model has been the
slowest to grow due to regulatory restrictions
that relate to this type of activity.
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Different sectors
Education and research
Public services
Business
Community and voluntary sector
Arts
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Different scale
1 Million
The Nifty Minidrive
239555
72135
Sir you are being hunted
Hackney Pirates
7793
New Leaf Coop
3340
Juice collaborations with Shlomo and MaJiKer
1550
Bedford Busking festival
535
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How does crowdfunding add value?
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Harnessing peoples motivations to get worthwhile
projects funded The direct connection between
entrepreneur and the crowd gives the
entrepreneurs the chance to appeal to investors
motivations and interests as well as their
wallets.
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Democratising funding and measuring demand in
advance Crowdfunding is a powerful way of
identifying what projects people want to see go
ahead.
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Lower transaction costs - By giving investors
more of a role in carrying out assessment, and
automating more of the funding process,
crowdfunding can reduce the transaction costs of
getting capital to entrepreneurs, making
financing cheaper.
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From mass production to personal production
- Crowdfunding helps businesses serve a more
diverse and personalised market, by backing what
otherwise would fail to get funded.
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Nestas work on Crowdfunding
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Working together across lab and PR
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Main outputs
Blog series
Funding Circle
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Platforms were backing
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Example platforms
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Staged rewards how do they work?
Amount Rewards No.
20 Custom t-shirt, badge, thank you letter 69
50 As above, plus handcrafted bag and postcards 28
150 As above plus handmade mini bike frame 10
300 As above plus choice of 1 day course or full size handmade bike frame 15
500 As above plus 4 day bike making course 56
2000 As above plus a bike and photo yearbook 0
Non financial Need Accountant and Electrician ?
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• Solar Schools
• Crowdfunding renewables
• Combining online-offline
• More than financial returns

What next? Iconic spaces. Solar cities.?
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Some possible risks

• What if good, effective projects cant tell their
  story well?
• If supporters come from existing networks, how
  will those in poorer areas manage?
• Wilful misuse (no case knowngtyet)
• Is it replacing or expanding giving?

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Some possible benefits

• More than money time, assets?
• Crowds of support network effect
• Innovative/high relevance ideas
• New types of audience reached

Mainstream funders experiment could help us find
out more
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Get in touch!

• Alice.casey_at_nesta.org.uk
• _at_cased